Tag Archives: Special Service Area

Management of the Ravenswood Community Council is under scrutiny again. An award winning series by The Bulldog in January and February noted that the charity, which runs Special Service Area 31, almost failed financially in the period 2005-7.

The series went on to criticize the SSA for failing to provide basic snow clearance following the heavy snow fall. It contrasted the failure in the SSA with successful clearance efforts in other areas that did not have SSA funding available.

SSA stands for Special Service Area. Created by the city, SSAs collect a property tax levy to fund “enhanced” services such as cleaning snow and trash from sidewalks. The RCC manages SSA 31 for the city.

As the manager of the SSA the RCC receives a management fee from the city. In addition it manages the services provided in the area, principally snow removal and street cleaning, but also promotion.

Although the SSA eventually cleared the sidewalks, it was a failure of the city’s Streets and Sanitation Department to clear the streets of snow on Ravenswood, while streets were cleared on industrial streets such as Rockwell and Bradley, that led to issues, according to the story, in ordinary commercial work and the efforts of charities such as the Night Ministry to maintain services.

The series is credited with being a key element in the election loss of Ravenswood Community Council President Tom O’Donnell in the aldermanic election.

A recent spat between a blog and the council has raised the issue again.

CSJ Report has errors

The post, found here at CenterSquareJournal, says the RCC is a tool of Schulter. “Current board members with political ties to Schulter include (Tom) O’Donnell, the former president of the 47th Ward Democratic Party, (Bill) Helm, the current president of the 47th Ward Democratic Party and Marty Casey, who was 47th Ward Streets and Sanitation Superintendent under Schulter.”

The inside scoop

The news that the RCC is a political tool of Schulter is not news. Sadly missing from the list of members with political ties to Eugene Schulter is Rosemary Schulter, listed by the RCC on its website as a director. Rosemary Schulter is married to Eugene Schulter.

The CSJ report goes on to confuse SSA revenue, describing $368,000 received as applied to “administering the Special Service Area #31 contract.”

The inside scoop

As noted by RCC Executive Director Chris Shickles in a reply, “RCC will receive about $50,000 in service provider compensation for managing the SSA which is in line with other similar sized SSAs throughout the city.”

The remainder of the funds are directed to efforts such as signage (the hanging banners you see on light poles), snow clearance, litter removal and landscaping. Much of that work is done by independent contractors.

The post says the RCC experiences high administrative costs.

The inside scoop

As The Bulldog noted months ago, administrative costs at the RCC have historically ranged up to 143.14 percent of revenue in 2007. The Bulldog also pointed to HRAIL as a program with glaring inefficiency. During a four year period the RCC administered HRAIL program repaired ten homes each year for $241,538, excluding the administrative costs.

HRAIL is a program of small home repairs intended to maintain senior citizens in the community.

HRAIL has been superceeded by the SARFS program: Small Accessible Repairs for Seniors.

And The Bulldog noted that much of the revenue received was spent on independent contractors and employees, not community efforts.

Despite the financial meltdown the RCC avoided, it continued on with O’Donnell at its head. On the one hand, the RCC headed into a serious financial meltdown under O’Donnell’s leadership. It was also a hands-off leadership, The Bulldog found. O’Donnell was only present at one SSA meeting over a two year period.

Since that initial examination of the SSA minutes, O’Donnell has continued to be absent from each SSA meeting.

The issue is not just that RCC has high administrative costs, but whether the city should even fund these entities. For one thing, RCC is not the only political creature in city that receives money. As Tom Tresser, a former candidate for Cook County Board President, noted if there is a need for these services there is nothing to prevent neighborhood businesses from getting together to provide them.

The services provide a means of cloaking city services. Few property owners and fewer voters understand whether they are covered by an SSA and how to influence them. There must be a more efficient means of administering SSA services than through chambers of commerce.

Plus, the creation of a relationship between the chamber and the city creates a dependency relationship that stifles political dissent.

In essence, the chambers become tools of the city, they lack transparency and accountability to the public.

Finally, the post says there was testimony that the RCC was “politically motivated.” And the post says a hire has “alleged connections to organized crime.”

The inside scoop

The assassination of people based on association is broad. Sheila Pacione, a new employee of RCC, is correctly noted by the blog to be a former staffer of Shulter for example.

Dan Stefanski, another employee, is painted by the blog as a childhood friend of “convicted” former Illinois Governor Rod Blagojevich. Stefanski parlayed that childhood friendship into a position in the Blagojevich administration.

And the post says he was fired from the Illinois Department of Transportation for drunk driving. AND Stefanski has a past as a bookie, the report says.

According to a 2005 Chicago Sun-Times article cited online by other web sites but no longer available, an International Brotherhood of Teamsters team of investigators named Stefanski is a friend of reputed mobsters Robert Abbinanti and Nick “The Stick” LoCoco. Stefanski, according to the report, issued a statement offering a $20,000 reward for the address of a mob informant.

Stefanski does not deny keeping company with alleged mobsters, according to the report.

In the spirit of full transparency, The Bulldog itself has ties to RCC. The Bulldog sponsored an event with RCC in September, “The Bells of Ravenswood.”

As noted last month, Michael Fourcher, the publisher of the CenterSquareJournal, is a prolific entrepreneur. According to the CSJ post, Fourcher was a contributor to the post.

Fourcher was associated with the politically connected Haymarket Group, Podesta Associates, former Secretary of Energy Bill Richardson and ran a political consulting firm as recently as last year, overlapping with his creation of the CenterSquareJournal blog. Fourcher’s political interest in ward politics remains unknown.

It is a “politically motivated” piece according to a reply to the article by Democratic ward boss Eugene Schulter.

According to social media, Schulter is running again for the 47th Ward Democratic committeeman position. Schulter has not formally announced his run.

*** UPDATE Nov. 13, 2011 @ 10.30A We added two paragraphs to explain the roll of SSAs and how they receive their funding. Go to the new text ***

*** UPDATE Nov. 13, 2011 @ 11.05A We moved two paragraphs to the end of the post to provide better flow to the story. And we added an explanation of what the HRAIL program is. ***

A Ravenswood Ave. pedestrian will encounter places with no snow removal, leading most pedestrians to walk in the street. Taken Monday Feb. 7 early afternoon. Credit: Patrick Boylan

A walk and a follow-up drive through the Ravenswood Industrial Corridor indicated that conditions on much of Ravenswood Ave. have not improved since a Sunday night study of Ravenswood snow removal.

Ravenswood Ave. is among the most serious issues still facing the neighborhood five days after a blizzard dumped twenty inches of snow on Chicago and two other storms have added additional snow. Hundreds of parking spots are unplowed and unusable and the sidewalk continues to be hazardous to walk on in this area.

Other areas of concern were the lack of cuts in ridges between Welles Park and neighboring streets, particularly those along Montrose Ave. Only two narrow cuts in the snow ridge have been made along the south edge of the park. One cut was made to allow vehicles to enter the park and the other is near the old children’s playlot.

Pedestrians have forced a passage through near Bell. However, this passage is treacherous.

Only the cuts made at Western, the driveway and at Lincoln are accessible to wheelchairs.

The follow-up of the Monday report on Ravenswood conditions included an afternoon walk down Ravenswood Ave. Many Ravenswood pedestrians complained that they were parking in nearby residential areas and walking several blocks to reach their work places.

When asked about snow removal by the Ravenswood Community Council, the manager for SSA 31, they replied that the only snow removal in the area had been done by property owners. One of the chief functions of SSA 31 is snow removal.

The functioning of SSA 31 and the Ravenswood Community Council has become an issue in the 47th Ward aldermanic race as machine candidate Tom O’Donnell has based his expertise on how RCC is run.

RCC, in turn, has not replied to questions about snow removal.

An earlier e-mail exchange between the executive director of the RCC and The Bulldog regarding other aspects of RCC work had said

“Our taxes speak for themselves. We’re growing because of the great work we’re doing to administer services and support businesses throughout Ravenswood, and we look forward to the opportunity of doing more work that helps the community.”

regards,
Chris Shickles
RCC

However, RCC snow removal is not comparing well with snow removal in other areas of Ravenswood. North Center had only one strip of area that seemed to require intervention, based on our study. That was the Town Center, a piece of land on Belle Plaine between Damen and Lincoln Ave.

NorthCenter Chamber of Commerce executive director Garrett Fitzgerald told The Bulldog that the Town Center was not actually in the SSA. However, Fitzgerald said efforts were being made to clear a path on the lot.

The SSA may be prohibited by law from working on this small area, despite its obvious association with the SSA manager, in this case the chamber. The Bulldog found city regulations are very strict about how SSA funds are spent.

Fitzgerald was alarmed at the amount of snow fall. Although the NorthCenter’s SSA snow removal contract is a fixed price contract. Fitzgerald noted that there is a cap on the amount of seasonal snow fall. That cap may fall this month, he warned, if there is more snow. That would lead to an over budget expenditure for further snow removal.

Fitzgerald said the SSA managers patrol the area during snow removal to determine whether the independent snow removal contractor performed their task. Business and property owners feed information to the SSA managers about snow removal over weekends and in out of the way areas.

The Bulldog generally found that North Center had excellent snow removal. Lincoln Square had good snow removal, except at Welles Park where the cuts need to be made, along some stretches of Lawrence and at the Sulzer Library.

It is not clear who is responsible for snow removal at Welles and Sulzer. The Chamber had closed by the time The Bulldog called Monday to ask for information. City maps indicate the library and the park fall within the SSA. However the SSA may not have assumed responsibility for cleaning those properties.

Ravenswood had large stretches of Ravenswood Ave. that had narrow sidewalk paths and in addition parking was very tight as no effort appears to have been made to clear the street.

In contrast, many areas with no SSA had cleared the sidewalks and, in the case of Campbell north of Irving Park, had cleared much of the street nearly curb to curb.

NorthCenter Chamber had reacted to The Bulldog story with enough information to note that its sole property in question was out of the SSA. Fitzgerald also indicated a path would be cleared by the chamber.

Other areas The Bulldog had noted on Monday morning were not surveyed Monday evening.

Calls and an e-mail were left with the RCC and an e-mail was left with the 47th Ward service office about the Ravenswood Ave. situation in early afternoon. No reply was made to The Bulldog from either. A pass through the industrial corridor at 11P did not indicate any snow removal activity or progress.

Tom O’Donnell has relied on his stewardship of the Ravenswood Community Council. However, reports filed with the state indicate the group has had significant financial issues and operates closer to the model of a chamber of commerce. Credit: Jane Ricard

Tom O’Donnell, the anointed successor to 47th Ward Democratic boss Eugene Schulter, is leaning heavily on experience gained at the Ravenswood Community Council. However, as The Bulldog presented in a post yesterday, evidence O’Donnell actively participated in management of the RCC is scarce. Paradoxically, that could be good news for O’Donnell.

As reported on Monday and previously, a study of the SSA 31 commission meetings indicate that O’Donnell attended just one of the 21 meetings held in 2009 and 2010.

SSA stands for Special Service Area. Created by the city, SSAs collect a property tax levy to fund “enhanced” services such as cleaning snow and trash from sidewalks. The RCC manages SSA 31 for the city.

As the manager of the SSA the RCC receives a management fee from the city. In addition it manages the services provided in the area, principally snow removal and street cleaning, but also promotion.

“In general SSAs are another tax district controlled by special interests,” activist Tom Tresser told The Bulldog. “A lot of residents are paying for an SSA and don’t even realize it. If businesses require special services they should tax themselves with membership dues.”

Tresser went on to say “the decision making process on who gets this money is hidden from public view. The public doesn’t know how the money is spent. It is ripe with abuse and needs to be investigated.”

O’Donnell, who started presiding over the RCC from sometime in 2004-5 to the present, oversaw a collapsing foundation that noted negative assets in 2007 and qualified financial audits for the three years 2005-7. A qualified financial audit means the auditor expressed an opinion that the financial statements may not meet all the requirements of generally accepted accounting principles.

Although 2007 revenues to the RCC shrank 45.5 percent to $108,487 from $199,184 in 2006, the RCC did not make any management changes, by for example laying off its $40,249 a year executive director or taking steps to reduce its $58,817 annual overhead.

As a service provider working to benefit seniors, the RCC was remarkably inefficient. In its best year, 2004, overhead and salaries only ate 76.6 percent of revenue. For several years during O’Donnell’s stewardship more than 100 percent of revenue was used to cover these costs.

2007 was the first set of financial reports issued in the years 2004-9 which did not mention the RCC’s Home Repair and Independent Living program. HRAIL, one of the headline programs of the charity, was allocated $241,538 in the preceeding four years, fixing about ten seniors homes each year, according to reports, or about 40 homes in four years.

Other programs that had been funded previously, but which are no longer reported include the cell phone program which the RCC says provided 200 free emergency cell phones a year to certain deserving people, a housing improvement program, a department of aging program and a crime prevention program.

According to the reports filed with the Illinois attorney general, these programs were allocated nearly all the revenue associated with the RCC in the four years they were reported separately.

However those reports are deceiving.

In fact, most of the revenue collected by the RCC was paid out to a handful of individuals working as independent contractors and as employees. Other money was spent for such overhead as office space, office supplies and expenses, insurance and professional services.

Qualified financial notes started in 2005. In a letter accompanying the audited financial statements to the RCC board of directors, B. F. Kearney, CPA noted “a certain amount of confusion and neglect in properly accounting for certain procedures.”

The audit report, it has to be noted, did not sense any fraud. It noted “we feel that there is no reason for any mistrust.”

The collapse of 2007 created a negative asset value of $2,201.

Thousands of additional dollars flowed through the SSA following the merger with SSA 37, with revenues rising 99.7 percent to $216,659 in 2008 from $108,487 in 2007. Revenues fell 37.3 percent in 2009. So, the increase was temporary.

However the merger saved the RCC, which in 2008 recognized $120,360 in net assets, up $122,561 from the year end 2007.

The RCC continues to manage SSA 31. Recent audited financial statements are available for the SSA only, and do not reflect the activities of the RCC. The most recent audit of the RCC is for the 2007 fiscal year.

As the Ravenswood Chamber of Commerce started to collapse last year, the notes from the SSA indicate the RCC has stepped forward to take over certain functions of the chamber including maintaining the banners hanging along Ravenswood Avenue, moving the RCC further from its charitable purpose.

Questions put to the RCC

The Bulldog attempted to contact the RCC with two calls and an e-mail to executive director Shickles. We did not receive any reply at the time of posting. The RCC was allowed 21 hours to respond. Our last message was to note that given the storm, we were prepared to offer additional time for a response.

I know we’ve had brief meetings. I publish the Welles Park Bulldog. We are preparing a story on the RCC for posting tomorrow. We had some questions regarding the financial statements the RCC has filed and the activities of the RCC.

What led to the financial collapse of the RCC in 2007?

How did the assets of the RCC change so dramatically between 2006 -2008?

How many homes are now in HRAIL? What is the number of homes in the HRAIL program for each of the past five years?

What is the RCC’s involvement with the emergency cell phone program

(Is it collecting them and turning them over to another agency for processing and distribution)?

Is the RCC paying for these phones,

How many phones is it moving through this program in each of the past five years?

Which activities of the Ravenswood Chamber of Commerce are being assumed by the RCC?

We’d prefer to talk to you as we may have follow-up questions about these matters.

*** UPDATE 02/01/11 13.24***

“Our taxes speak for themselves. We’re growing because of the great work we’re doing to administer services and support businesses throughout Ravenswood, and we look forward to the opportunity of doing more work that helps the community.”

Regards,
Chris Shickles

*** End Update ***

1This item we call overhead in this and subsequent discussion is from IRS Form 990. It is a summary of lines 25, 26, 28, 29, 31-40, 43a-d and f for each of the four years.

However, a study by The Bulldog of filings by the RCC with the Illinois Attorney General indicate an organization in disarray, with community service activities being a sideline to serving businesses, and with faltering charitable contributions.

O’Donnell, the annointed successor to 47th Ward Democratic boss Eugene Schulter, is leaning heavily on experience gained at the RCC. However records seem to indicate O’Donnell hasn’t been fully engaged at the RCC, despite his claims.

It is part of a biography presented to the public by O’Donnell. A biography that is filled with misleading statements and half truths, The Bulldog found.

O’Donnell’s reliance on the stewardship of the RCC can be found in a statement in his flyer “Dedicated to serving you” where he states he was “10-term president of the Ravenswood Community Council.” O’Donnell also spoke to the Independent Voters of Illinois- Independent Precinct Organization, in answer to their questionnaire: “I have been President of the largest Community Organization in the 47th Ward for the past ten years.”

The statements filed with the AG put that claim into question. A 2003 IRS Form 990 on file indicates the president at the time of filing, August 16, 2004, was Frank Crescenzi. Later in the same document, a list of officers and employees for 2002 lists O’Donnell without a title and a different man, Manual Sugaro, as the president of the group.

[See the questions put to O’Donnell by The Bulldog and the response from O’Donnell below.]

Further, a previous study of commission minutes maintained by the RCC for its management of SSA31 record meetings nearly every month, with records going back to January 2009. O’Donnell is recorded as being present at only one commission meeting of the SSA31 in the two year period.

SSA31 is managed by RCC. Historically the SSA provides RCC with between 63 percent and 97 percent of its annual revenue.

SSA stands for Special Service Area. Created by the city, SSAs collect a property tax levy to fund “enhanced” services such as cleaning snow and trash from sidewalks, landscaping and other improvements within a business or industrial district. SSAs in Chicago often use their funding to pay chambers of commerce to manage an area. That proved to be a contentious issue when Mayor Richard Daley proposed cutting payments to chambers in the 2011 budget.

Schulter was so incensed by the proposal to cut the chambers off that he vowed to vote against the $6.2 billion city budget budget unless the $3.5 million subsidy to chambers was restored. The subsidy to RCC amounted to $32,303 in 2009, city records indicate.

Errors of omission

O’Donnell explained his interest in and commitment to public schools by noting he had two children who attended public schools. The statement from the Coonley forum echoes a statement on his web site when O’Donnell described himself this way: “the father of two Chicago Public School graduates…”

To the Sun-Times, O’Donnell said “I have two children, Lilly and Megan, both of whom have attended public schools here…”

However one daughter graduated from Gordon Tech, a Catholic high school in 2006.

The ommissions continued in O’Donnell’s statements to the IVI-IPO. That group, which offered its endorsement to Schulter prior to his withdraw, asked about previous political experience. “Please be specific” the site instructed. O’Donnell listed work for Paul Simon, Barack Obama and John Kerry.

Prominently missing was his work as a chief of staff for Schulter and the fact previously reported that he passed petitions for Schulter in the current election.

O’Donnell’s response

Tom O’Donnell has been on the board of the Ravenswood Community Council for the last 10 years, in addition to being a member since the mid-1980s. Under his leadership, the Ravenswood Community Council has done an excellent job of providing services for senior housing, senior access to emergency services, and keeping sidewalks safe and clean. Council services, especially street and sidewalk beautification in front of local businesses, can make the difference between a vibrant economic area and an area where businesses close their doors. Tom is proud of his years of volunteer service with the Ravenswood Community Council, and as alderman, looks forward to continuing his work of promoting public safety, helping businesses and providing vital services throughout the ward.

– Dan McDonald, campaign manager

Questions to O’Donnell

The Bulldog put pressure on O’Donnell over the weekend to answer questions contained in this report. In the interest of transparency below is the e-mail sent to the candidate.

The Bulldog intends to post a story on Monday morning regarding some claims in your bio. We need you to give us statements about a number of issues.

It is late on Saturday, but we will call you and your COS tomorrow morning. We will make a number of calls. However, if you decide again that you will not answer or will not return our calls, we will publish as planned on Monday. Some effort must be taken on Sunday to show you will respond to these questions.

That in the years 2009-10 the SSA 31 commission held 21 meetings, roughly one each month. That you did not attend any of these meetings

That you claim you were president of the RCC for ten consecutive terms. However IRS forms 990 indicate that the president in 2002-3 was Manual Sugaro and further that in 2003-4 the president was Frank Crescenzi.

Regarding the RCC

That in the year 2007 the RCC had negative assets.

That the RCC had qualified financial statements for the years 2005-7, representing at least three of the six years you say you were in control of this group.

That qualified audits ended with the selection of a different accountant.

That despite significant financial difficulties in 2007 and a loss of half of its income, the RCC did not cut staff or other overhead. That staff accounted for more expense by a large measure each and every year you have managed the group than programs designed to help senior citizens or other citizens.

We would like to know how many homes were repaired last year through the HRAIL program and how many cell phones were provided by RCC. We would like these numbers for the past five years. We would like to know all program details of RCC initiatives and SSA 31 initiatives for the past five years.

We would like to know where you say your children attended school, where they graduated from, including dates of attendance.

We would like to know why you did not fully inform the IVI-IPO that you served as Eugene Schulter’s Chief of Staff or that you passed petitions for Schulter in the current election.

We do not want to receive an e-mail response about these issues as we have follow-up questions about many of these issues. An e-mail is not adequate as a response. We have to hear you discuss these issues in an interview. The reason for that demand should be obvious.